Commission-free trading platform Robinhood Markets Inc. HOOD has seen cryptocurrencies take a larger share of its reported revenues in recent years, rendering it susceptible to their market movements to some extent.

What happened: None other than CEO Vlad Tenev conceded in a December interview that the HOOD stock was "highly correlated" with Bitcoin BTC/USD, the world's largest cryptocurrency by market capitalization, despite Robinhood not accepting Bitcoin as a treasury reserve asset.

Tenev made the remark when Bitcoin was in the middle of a bull run, having crossed the $100,000 milestone earlier in the month.

At the time, the correlation coefficient between Bitcoin and the HOOD stock was around 0.70, according to TradingView, indicating a strong positive linear relationship between the two assets. This meant that as one increased, the other tended to follow suit.

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The coefficient rose further to 0.96 in late January, almost indicating a perfect correlation. 

However, starting in February, HOOD and BTC began to decouple, with the coefficient falling from 0.91 on Jan. 31 to a low of -0.72 by Feb. 9. The high negative values implied an inverse relationship, i.e., if one rises, the other falls. 

Indeed, while Bitcoin dipped below $100,000 around this time, HOOD continued to rise. Note that this was the time when President Donald Trump announced that the U.S. would impose new tariffs on imports from Canada, Mexico, and China.

After Feb. 10, though, the situation began to reverse, with the coefficient steadily rising to 0.78 within a month. Since then, the value has remained bound between 0.60 and 0.78. Evidently, both assets have moved sideways during the last month and a half.

Why It Matters: Robinhood will announce its first quarter 2025 financial results on April 30. 

The firm recorded a more than fivefold surge in cryptocurrency volumes in the fourth quarter, with cryptocurrency revenue accounting for more than half of its total transaction-based revenue.

However, the firm’s dominance may not be sustained in the first quarter, as cryptocurrency transactions fell by 14% in February, exceeding drops in equities and options, according to a press release.

Price Action: At the time of writing, Bitcoin traded at $87,464.25, up 3.11% in the last 24 hours, according to data from Benzinga Pro. Since 2025 began, Bitcoin has lost 6.36% of its value.

Shares of HOOD closed 1.21% higher at $41.18 during Friday’s regular session. Year-to-date, the stock has gained 10.52%.

HOOD stock demonstrated a high momentum and growth score as of this writing. Visit Benzinga Edge Stock Rankings to check how other cryptocurrency trading-related stocks rank on these parameters.

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